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Real Estate

Important Commercial Lease Considerations

When you’re about to enter into a commercial lease, you need to put some serious thought into the terms. Commercial Leases are often as long as five years, and you’ll likely be bound by the terms in your contract for a substantial period of time. Here is an overview of some of the most fundamental aspects of commercial lease contracts that you need to consider.

Leases Favor the Lessor

When you’re going to rent a new space for your business, you may be surprised to find how much the lease contractors favors the landlord and how few rights and protections it offers to you as the lessee. However, this is true of virtually all leases. Contracts are written to favor the parties who draft them. Consequently, contracts such as leases, loans, and user agreements always favor the drafter. To counter this inequity, courts typically interpret agreements in favor of the non-drafting party.

You need to Carefully Review Payment Terms

In addition to a set base rent, sometimes payable quarterly rather than monthly, some commercial leases require tenants to pay a percentage of their operating revenue as rent. Be sure that you understand how this will be calculated, and what the financial impact would be like for your business in a long-term lease. When you’re choosing a commercial real estate attorney Austin, it’s important to select a provider who is familiar with commercial leasing activity in your area and is able to thoroughly explain the implications of proposed payment terms.

Commercial Tenancies Differ from Residential Tenancies

A commercial lessee doesn’t have the same degree of legal rights and protections that a residential lessee does. In effect, it’s much easier for landlords to evict a commercial tenant than a residential tenant. Your right to cure nonpayment and your ability to postpone the eviction process isn’t statutorily protected.

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